Zhitong Hong Kong Stock Early Knowledge | The CXO sector is expected to receive performance support, JOINN is expected to see a year-on-year increase of 884.9% in net profit attributable to the parent company in the first half of the year, reaching 1,377.4 million

【Today's Headlines】

Domestic and foreign demand resonate, industry outlook improves; institutions say CXO rebound has performance support

In the first half of this year, the scale of domestic innovative drug BD going overseas reached a record high for the same period, coupled with a significant recovery in overseas biopharmaceutical financing, with multiple leading indicators confirming the simultaneous improvement of domestic and foreign demand. On the evening of July 13, Pharmaron disclosed its semi-annual performance forecast, stating that the company's new signed orders increased by more than 30% year-on-year; among them, laboratory services new signed orders increased by more than 20%, and small molecule CDMO services new signed orders increased by more than 50%. It is worth mentioning that due to active new drug research and development, the price of experimental monkeys has risen again. Reports indicate that the current price of crab-eating macaques has surpassed 200,000 yuan.

Huaxin Securities research report believes that from early June to now, the CXO sector has rebounded ahead of innovative drugs, supported by performance and orders. From June 8 to July 10, the CRO index has rebounded by 21.72%. Looking ahead to the second half of the year, the growth of innovative drug financing will continue to support the CXO prosperity. Currently, the leading CRO company WuXi AppTec has a forecast PE of 17.58X for 2027, while Kelun has a forecast PE of 33.19X. As the mid-term performance approaches, the order trend for the second quarter is gradually becoming clear, and the CXO sector's rebound is expected to gain performance support.

【Market Outlook】

Nasdaq China Golden Dragon Index down 0.11%

Overnight, U.S. stocks closed with the Dow Jones Industrial Average up 9.63 points from the previous trading day, closing at 52,508.27 points, an increase of 0.02%; the S&P 500 index rose 28.25 points, closing at 7,543.59 points, an increase of 0.38%; the Nasdaq Composite Index rose 233.83 points, closing at 26,107.01 points, an increase of 0.9%.

Most large technology stocks rose, with Nvidia and Intel up over 4%. Storage concept stocks surged, with SK Hynix rising over 27%, closing at a 51% premium to Korean-listed stocks, SanDisk up over 5%, and Micron Technology up nearly 5%. Cryptocurrency concept stocks, computer hardware, metals, and mining sectors all rose, with Contour Technology up over 9%, Dell Technologies up over 7%, and Strategy up nearly 6%.

Popular Chinese concept stocks were mixed, with the Nasdaq China Golden Dragon Index down 0.11%. The Hang Seng Index ADR rose, closing at 24,404.89 points, up 64.16 points or 0.26% compared to the Hong Kong close.

WTI crude oil futures for the current month on the New York Mercantile Exchange rose by $1.69, closing at $79.83 per barrel, an increase of 2.16%. COMEX gold futures for the current month rose by $52.60, an increase of 1.31%, reporting $4,058.3 per ounce.

【Hot Topics Ahead】

Central Bank: On July 15, it will conduct a 1.4 trillion yuan reverse repurchase operation

According to news from the People's Bank of China on July 14, to maintain ample liquidity in the banking system, on July 15, 2026, the People's Bank of China will conduct a 1.4 trillion yuan fixed-quantity, interest rate bidding, multi-price winning reverse repurchase operation, with a term of 6 months (184 days), maturing on January 15, 2027 (postponed in case of holidays) Black Sesame Intelligence (02533) Completes Acquisition of Yizhi Electronics, Furthering Edge AI Strategic Layout

According to the three-year performance commitment signed by both parties, Yizhi Electronics is expected to achieve a taxable operating income of no less than 300 million yuan, 400 million yuan, and 500 million yuan for the years 2026-2028, with a cumulative total of no less than 1.2 billion yuan; during the same period, net profits are expected to be no less than 5 million yuan, 35 million yuan, and 50 million yuan, with a cumulative total of no less than 90 million yuan. Current operational data shows that Yizhi Electronics has achieved rapid year-on-year revenue growth in the first half of the year, exceeding the net profit commitment for the entire year of 2026, with significant improvements in gross margin and profitability levels, and the operational situation in the second half of the year is expected to continue to improve. Following the completion of the acquisition, Black Sesame Intelligence has officially formed a full gradient computing power matrix ranging from 0.5T to 1000T and above.

Hansoh Pharmaceutical (03692) Investee Avere to Merge with Nasdaq-Listed Company NextCure

Accordingly, Avere will merge with NextCure. In this regard, the group (i) has granted Avere an exclusive license for the cyclic peptide interleukin-23 (IL-23) receptor antagonist HS-20118 (AVR-001); and (ii) has participated in a round of targeted issuance initiated by Avere, which includes other investors.

On June 15, 2026, the group entered into an exclusive licensing agreement with Avere for this product. According to the licensing agreement, the group grants Avere an exclusive license to develop, produce, and commercialize the product globally (excluding mainland China, Hong Kong, Macau, and Taiwan), subject to its terms and conditions. The group is entitled to receive a total upfront payment of $120 million, up to $2.18 billion in milestone payments related to development and sales, and royalties ranging from the mid-single digits to low double digits as a percentage of sales in the licensed regions.

Yangtze Optical Fibre and Cable (06869): Expected Net Profit Growth of 711%-914% in the First Half

Yangtze Optical Fibre announced that it expects the net profit attributable to shareholders of the listed company for the first half of 2026 to be between 2.4 billion yuan and 3 billion yuan, representing a year-on-year growth of 711%-914%. During the reporting period, driven by the accelerated construction of computing power data centers, the demand for new optical fiber and cable products both domestically and internationally has continued to grow, and the industry supply-demand structure has continuously improved. The company has fully leveraged its globally leading industry position, seized international market opportunities, and vigorously expanded its computing power data center-related business, achieving the expansion of core customers, optimization of product structure, and enhancement of profitability, resulting in year-on-year growth in operational performance. Note: The company's Q2 net profit is expected to be between 1.905 billion and 2.505 billion yuan, with Q1 net profit at 495 million yuan, thus Q2 net profit is expected to grow by 284%-405% quarter-on-quarter.

Tianqi Lithium (09696): Expected Net Profit Growth of 3276%-4935% in the First Half

Tianqi Lithium announced on July 14 that it expects the net profit attributable to the parent company for the first half of 2026 to be between 2.85 billion yuan and 4.25 billion yuan, representing a year-on-year growth of 3276.35%-4934.91%, compared to a profit of 84.41 million yuan in the same period last year. The company stated that the main reason for the performance change during the reporting period is driven by multiple favorable factors such as the development of the new energy industry and the growth of downstream demand, with the average sales price of the company's main lithium products significantly increasing compared to the same period last year Ganfeng Lithium (01772) expects net profit attributable to shareholders in the first half of the year to be approximately RMB 3.65 billion to RMB 4.6 billion

The net profit range after deducting non-recurring gains and losses is expected to be RMB 3 billion to RMB 4.2 billion, an increase of approximately 428.64% to 560.10% compared to a net loss of RMB 913 million recorded in the same period of 2025 after deducting non-recurring gains and losses. Benefiting from the rapid development of the global new energy industry and the growing demand for lithium salts from downstream customers, the sales prices of the company's lithium salt products have significantly increased compared to the same period last year; at the same time, as the production capacity of lithium resource projects is gradually released, the company's cost structure has been effectively optimized. The company sold part of its shares in PLS Group Ltd (PLS), confirming corresponding investment income. In addition, investment income from joint ventures and associates has also increased, further boosting the company's current profits.

Shanghai Petrochemical Company (00338) issues profit warning, expects mid-term net profit attributable to shareholders to be approximately RMB 234 million to RMB 351 million, turning losses into profits year-on-year

In the first half of 2026, influenced by geopolitical conflicts driving international crude oil prices higher and adjustments in the industry supply-demand pattern, the prices of petrochemical products showed an overall upward trend. The company continues to optimize production operations, with the price increase of major products exceeding the increase in crude oil processing costs, leading to a year-on-year increase in product gross profit and overall profitability.

China Duty Free Group: Revenue of RMB 27.592 billion in the first half of 2026, net profit increased by 19.49% year-on-year

China Duty Free Group announced that in the first half of 2026, the company's total operating revenue was RMB 27.592 billion, a year-on-year decrease of 1.99%; the net profit attributable to shareholders of the listed company was RMB 3.106 billion, a year-on-year increase of 19.49%. The company seizes the opportunity of the Hainan Free Trade Port, consolidates its market advantage in Hainan, promotes improvements in airport duty-free store operations, and achieves good results from the acquisition of DFS's retail business in Greater China. The gross profit margin of the main business continues to improve, increasing by 0.73 percentage points year-on-year, and by 1.44 percentage points in the second quarter year-on-year. The above data is preliminary and subject to the semi-annual report.

Chifeng Gold (06693) issues profit warning, expects mid-term net profit attributable to shareholders to be approximately RMB 1.7 billion to RMB 1.78 billion, an increase of approximately 54% to 61% year-on-year

It is expected that the net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, will be approximately RMB 1.71 billion to RMB 1.79 billion for the first half of 2026, an increase of RMB 598 million to RMB 678 million compared to RMB 1.112 billion in the same period last year, representing an increase of approximately 54% to 61% year-on-year.

Cambridge Technology (06166) issues profit warning, expects mid-term net profit attributable to shareholders to be RMB 310.3 million to RMB 359.3 million, an increase of 156.65% to 197.18% year-on-year

It is expected that the net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, will be RMB 302 million to RMB 351 million for this reporting period, an increase of RMB 183 million to RMB 232 million compared to the same period last year, representing an increase of 153.72% to 194.97% year-on-year.

JOINN expects net profit attributable to shareholders in the first half of the year to increase by approximately 884.9% to 1377.4% year-on-year During the reporting period, the market price of biological assets increased, coupled with natural growth and appreciation, driving a positive change in its fair value, which made a positive contribution to the company's performance. In addition, during this reporting period, the company's laboratory continued to maintain a good and stable operational status. Although the industry as a whole is recovering, the revenue for this period only achieved a slight increase due to the lagging effects of previous intense competition in the industry, and the gross profit level still needs to recover.

China Nonferrous Mining (01258) Issues Earnings Upgrade, Expected Mid-term Shareholder Profit of Approximately USD 420 Million, an Increase of Approximately 60% Year-on-Year

The board of directors expects that for the six months ending June 30, 2026, the main reason for the increase in profit attributable to the company's owners is the rise in international copper prices and sulfuric acid prices.

CITIC Construction Investment Securities (06066) Issues Earnings Upgrade, Expected Mid-term Net Profit Attributable to Parent Company of RMB 7.214 Billion to RMB 8.116 Billion, an Increase of 60% to 80% Year-on-Year

According to preliminary calculations by the finance department, it is expected that for the first half of 2026, the net profit attributable to the parent company's shareholders, after deducting non-recurring gains and losses, will be between RMB 7.339 billion and RMB 8.241 billion, an increase of RMB 2.868 billion to RMB 3.770 billion compared to the same period last year, representing a year-on-year growth of 64% to 84%.

Zhongzhou Securities (01375) Expects Mid-term Net Profit Attributable to Parent Company of RMB 380 Million to RMB 430 Million, an Increase of 45.98% to 65.19% Year-on-Year

It is expected that for the first half of 2026, the net profit attributable to the parent company's owners, after deducting non-recurring gains and losses, will be between RMB 360 million and RMB 410 million, an increase of RMB 107 million to RMB 157 million compared to the same period last year, representing a year-on-year increase of 42.17% to 61.91%.

China Life Insurance (02628) Expects Mid-term Net Profit Attributable to Parent Company of Approximately RMB 128.933 Billion to RMB 137.119 Billion, an Increase of Approximately 215% to 235% Year-on-Year

The company's asset allocation continues to optimize, and the layout in areas such as new productive forces is steadily advancing, achieving good investment performance.

【Stock Highlights】

Lingyi iTech (01688): The Company Plans to Invest RMB 4 Billion to Participate in the Restructuring of Futong Jiashan and Enter the Optical Communication Field

Lingyi iTech plans to participate in the restructuring investment of Futong Group at a cost not exceeding RMB 4 billion, obtaining control and operational rights over related assets of Futong Jiashan. It is reported that Futong Jiashan is one of the few core enterprises in China with complete self-research and production capabilities for "optical rods - optical fibers - optical cables." In addition, the company acquired a 35% stake in Liminda for RMB 875 million and obtained voting rights delegation, controlling a total of 52.78% of the voting rights. Liminda is a core supplier of liquid cooling for AI servers and has obtained NVIDIA AVL certification, entering its top supply chain.

Changjiang Securities released a research report stating that Lingyi iTech is deeply integrating into the global AI computing power core supply chain by focusing on "hardcore physical layer hardware." By absorbing high-quality restructured assets (Futong Jiashan) and leading technology (Liminda), Lingyi has begun to establish a moat in the AI computing infrastructure track and is expected to open up a highly explosive second growth curve beyond edge AI